Gold Price Forecast: XAUUSD’s rebound appears elusive as Fed bets resettle

• Gold price struggles to defend bulls despite snapping two-day downtrend.
• Mixed sentiment, sluggish yields challenge XAUUSD bears during the first negative week in three.
• Light calendar requires traders to keep their eyes on the risk catalysts for fresh impulse.

Gold price (XAUUSD) remains sidelined around $1,765 as the latest recovery fails to convince buyers during early Friday.

The reason could be linked to the recently hawkish statements from the Federal Reserve officials, as well as challenges to sentiment from China. However, a lack of major data/events and global policymakers’ readiness to tame recession woes tease the XAUUSD buyers.

On Thursday, St. Louis Federal Reserve President James Bullard and Minneapolis Federal Reserve Bank President Neel Kashkari challenged the market’s pre-established views on the Fed’s next rate hikes, mostly in favor of the 50 bps moves. The reason could be linked to the strong Retail Sales and Producer Price Index (PPI) data.

Following the hawkish Fedspeak, the US 10-year Treasury yields recovered from the six-week low and marked the biggest difference with the two-year counterpart since the 1980s, suggesting the recession woes. That said, the recent easing in the Fed bets favoring a 50 bps rate hike in December, as well as the increase in the wagers supporting the 75 bps move, also weighs on the Gold price.

Furthermore, China’s failure to please traders, despite expecting higher growth in the next years, joins geopolitical woes surrounding Russia to keep the Gold sellers hopeful.

However, a light calendar and optimistic comments from the policymakers of Japan and China challenge the XAUUSD bears of late, making it doubtful.

Technical analysis

Despite the latest rebound, the Gold price holds onto Wednesday’s bearish break of a two-week-old ascending trend channel, which in turn keeps sellers hopeful.

Also signaling the XAUUSD downside are the bearish MACD signals and the quote’s recent inability to cross the 78.6% Fibonacci retracement of the metal’s August-September downside.

That said, the Gold sellers may wait for a downside break of the latest swing low, around $1,755, for conviction before targeting the 61.8% Fibonacci retracement level of $1,733.

On the contrary, an upside clearance of the 78.6% Fibonacci retracement level of $1,766 won’t hesitate to recall the $1,800 threshold back to the chart.

Gold price: Four-hour chart

Trend: Further weakness expected